Due Diligence in India, is the key activity in Mergers & Acquisitions (M&A), carried out by the buyer to determine a purchase price, determine areas of value creation and minimize risks. In any merger, acquirers do everything in their capacity to determine the synergies that may come from sharing of capabilities, economies of scale and implementation of best practices. But, however lucrative the synergies may seem, acquirers should evaluate all possible aspects in detail before the transaction happens.

It is a well known problem that many times when companies merge, either the expected value creation doesn’t happen or acquirers fail to benefit from it. Also, more & more acquirers are feeling that traditional Financial Due Diligence offers limited or no insight when it comes to estimating real ground level synergies and that errors in estimating the value creation are leading to undesired results. In order to assess the real value creation and synergies, a number of acquirers are also performing Operations Due Diligence in India (ODD) to study the target’s operations in detail, in order to determine what kind of investments would be required after buying the company – this gives them a point for negotiating the prices during discussion.

However, foreign buyers in India are faced with a situation where they have limited data about the target. Targets hesitate to disclose any information to their employees or business partners – resulting in limited or no access to target companies’ managers, workforce & capabilities, supplier network, channel partners and customers. This acute lack of information sometime leads to poor assessment of synergies and misleading targets.

To address these challenges, M+V has used its extensive experience in managing operations to carry out ODD on behalf of its clients in India. In 2012, M+V carried out complete ODD in a € 110 million deal where a Swiss group acquired the majority stake in a leading Indian manufacturer in road construction equipment industry. The whole exercise was carried out in 10 weeks. To begin with, the team carried out site-visits and developed an in-depth understanding of the key objectives; this was followed by submission of data requests and detailed understanding of target’s capabilities in Sales, Marketing and Production, Supply Chain & Procurement, Quality, HR and IT. This was carried out through value stream analysis, detailed interviews and onsite visits.

A holistic look at the operational impact on the business, combined with visits to end customers, helped in validating many areas of concern. Assessments regarding capabilities – product development skills, export to neighboring countries, low-cost production, post-merger capital expenditure, environmental concerns – were helpful in charting out action plans for realizing the benefits from synergies.

In another project, the M+V team discovered that the target purchased materials from vendors by paying exorbitant amounts and there was not even a quality check on the incoming material. It turned out that the vendor company was run by a relative of the owner of the target company and therefore, the management kept quiet on the issue. This would not have been discovered by a Financial Due Diligence – only the Operations Due Diligence avoided a disaster from the buyers’ perspective. The team faced the challenge of gathering hard-to-obtain data and doing an in-depth analysis in a short-period of time. M+V’s knowhow of the local language/ culture, expertise in managing operations and a supportive network combined with detailed review from buyers experienced management helped in managing the exercise smoothly. The benefits gained from the ODD were worth the extra effort and helped in making the right decisions during and after the merger.

M+V analyzed our Industry in India very thoroughly.
The results have been a great support for us forming the basis for our India Strategy. I highly recommend working with M+V to really understand what is important for the Indian market.

The cooperation of JUMO and Maier+Vidorno is a success story in India since 2008.
Our sales, market presence and profitability in India shows constant growth. M+V knows about the challenges foreign companies face while doing business in India – and provides hands-on solutions.

Bjoern Becker, Export Sales, Jumo GmbH & Co. KG

Maier+Vidorno understands business challenges in the Indian business environment and provides solutions with the help of its experts. M+V has experience in running business diagnostics and implement improvement and expansion strategies in various industries in India.

René Plüss, CFO, Member of the Board, Regent Beleuchtungskörper AG

M+V were a great support in the preparation and implementation of our market launch in India.
Their comprehensive expertise - including their knowledge of the country, its culture and customs - have been invaluable.

Our cooperation with M+V proved to be the right decision that helped LEMKEN get a foothold in the Indian market right from the start. With M+V’s India expertise across all business functions, we were able to rely on them for our every need to set-up and run our business in India in an efficient and compliant manner.

Vijay Rawal, Director, LEMKEN India

The BIS registration project went smooth and efficient. We are very satisfied with the way the documentation, communication and inspection on-site was handled from the Maier+Vidorno Team. We are happy to recommend working with M+V in India - with the experts' advice you will need.

Andreas Dauerböck, Quality Assurance, voestalpine Grobblech GmbH

India has great investment potential for foreign companies if you manage the highly complex business environment professionally.
Our experience shows - Maier+Vidorno is a competent partner to efficiently set up and run your business.

I value the proactive and hands-on approach from Maier+Vidorno. We found with M+V the right partner to set up and grow our sales to a profitable organization in India.

Bjoern Becker, Export Sales, Jumo GmbH & Co. KG

Outsourcing our back-office administration to M+V in India was the right decision for us. We value the professional and transparent support in all small and big operational questions.

Chris Staeheli, Regional Director, Medela AG

Maier+Vidorno is our extended team in India. They keep my head free to focus on Marketing & Sales.

Amit Gogia, Country Manager, Medela India Pvt. Ltd.

The BIS registration project went smooth and efficient. We are very satisfied with the way the documentation, communication and even inspection on-site was handled from the Maier+Vidorno Team. We are happy to recommend working with M+V in India – with the experts’ advice you will need. We are happy to recommend working with M+V in India - with the experts' advice you will need.

DI Robert Achleitner, Quality Assurance, voestalpine Stahl GmbH

We are very happy with the professional and supportive approach of Maier+Vidorno in establishing our wholly owned subsidiary company in Mumbai, India. The entire process from the inception to the fully functional stage of subsidiary was well planned, efficiently executed and absolutely hassle free guided. I definitely recommend Maier+Vidorno as an India entry and expansion expert.

We have many subsidiaries all over Asia – in India we get full administrative support from M+V. Through specific, transparent and professional performance reporting in finance and logistics customized to our requirements, I can efficiently steer the business from a distance with the assistance of our professional team on site – consequently, our business in India grows in the right direction.

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